So why do so many U.S. consumers know so little about their credit scores?

According to the Consumer Federation of America, 40 percent of Americans didn't know that credit card companies use credit scores to make decisions about credit approval and interest rates, and another 42 percent didn't know mortgage lenders do the same thing.

And there's more...

43 percent of U.S. adults believe age is a factor in calculating interest rates (It's not.)

Up to 35 percent of consumers don't know that creditors are obligated to report the credit score used in making a credit decision.

"Credit scores have become so influential in the lives of most consumers that tens of millions are severely disadvantaged by their lack of knowledge about these scores," says Stephen Brobeck, CFA executive director. "Low credit scores will often cost car buyers more than $5,000 in additional finance charges and cost home purchasers tens of thousands of dollars in additional mortgage loan costs. And low scores are likely to limit consumer access to, and increase the cost of, services such as cell phone service, electric service and rental housing."

Consequently, job No. 1 for consumers is to know their credit score, know what calculations drive their credit scores, and know what to do to improve those credit scores.

One way to check all three of those items off your list is dig deeper and find out what drives the insiders at credit scoring firms (like TransUnion, Experian or Equifax) when they calculate credit scores.

After all, if you know how a credit score analyst thinks, then you're well on the way to knowing what shapes your credit health, and how to improve that credit health going forward.

Here's where to start . . .

Understand different credit scoresKevin Gallegos, a vice president with Freedom Financial Network in Phoenix, notes the three major reporting agencies each report their own credit scores, based on running information they have collected through the FICO scoring formula, incorporating credit history, amount of credit available and used, number of late and on-time payments, and whether any payments due are in default.

"Different creditors use different factors to rate overall credit worthiness, but it basically comes down to whether you pay, and pay on time, and whether creditors have reason to believe you might be overextending yourself," he says.

The more responsible you are with credit, the better your score will be.

Know that bill payments count -- big-timeGallegos also says that one of the biggest factors driving credit agency analysts are bill payments.

"Always pay bills on time," he says. "Begin immediately to pay every bill on time, every time. On-time payments are the most important factor in developing good credit. Paying bills on time for as little as one month can raise a modest credit score by 20 points."

Keep your older credit cards -- but don't use them heavilyCredit score analysts invariably reward consumers with the longest credit card history on the same card. That is, as long as the cardholder doesn't rack up too much of a balance on the card.

"It sounds funny, but credit bureaus give the highest scores to those who appear not to need credit," explains Tim Lucas, a vice president of mortgages at MyMortgageInsider.com. "For instance, about one-third of the weight of a credit score is given to the percentage of a consumer's credit. Most experts say to keep credit card balances below 30 percent of the available balance. So if you have a $10,000 limit across all credit cards, don't let your total debt balance go above $3,000."

Go slowLucas also says that credit reporting firms favor consumers who don't open up a slew of credit cards, or who take out a lot of loans.

"A lot of new credit accounts in a short period of time can signal that a consumer is in financial trouble," he says. "That's why credit bureaus give higher scores to those with older accounts. When you open new accounts, do it slowly."

To build a good credit score, you need to think like the insiders do. Take the tips above and use that "insider knowledge" to boost your credit health -- and save big on interest rates and charges in the process.

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